Mario Draghi’s historic phrase to save the euro is a legacy known in Paris. Relying exclusively on it may be fatal. It is a phrase that has already found a prominent place in the books of European, but also of… banking history. It was the summer of 2012, in the middle of the great financial crisis when the Italian economy was faltering and it came under the crosshairs of the “markets”. The fear that the “great patient of the South” would not be able to refinance its debt came to a head.

The Italian Mario Draghi, who at the time had only been in the position of head of the European Central Bank for a few months, had said the historic “whatever it takes” and even from London where he happened to be in those critical days. In other words, he pledged to do “whatever it takes” to protect the euro. It was a statement-warning to speculators, but also an important political legacy that caused not a few reactions since many accused him of having exceeded his powers.

“Emergency Lender”

The ECB thus designated itself as an “Emergency Lender” to prevent Italy’s exclusion from the international financial markets, and the worst was averted. Michel Barnier, a politician with a long tenure in the European bureaucracy of course, knew all this, when shortly before the budget vote of his ill-fated government of a few weeks, he painted in the blackest colors the possible consequences of what ultimately did not avoid. He certainly preferred to refer to the much smaller weight, as a percentage of the Eurozone economy, Greece’s economy when he threatened France with storms and storms, not so much because he really counted on such a thing, but mainly because he hoped to save himself by taking risks.

The Barnier proposal was voted down, he himself resigned, but no storm followed. On the contrary, a few hours later the interest rates of the French bonds were falling, to the relief of the French bankers, but apparently also of President Macron. Many analysts saw behind this apathy of the markets not only the fact that the development was predetermined, but also the security given by the memory of that determination of Draghi.

Lagarde’s nightmares

It looks like humor of the story. Then there was the threat of a collapse of the Italian economy with an Italian at the helm of the ECB. Today, when some are circulating scenarios for threatening shocks to the French economy, a French woman is in command in Frankfurt. Christine Lagarde has not had to make any kind of public statement of similar content in recent weeks. But as an expert in the field, she knows the weight she carries. And he has every reason to worry about having to follow in Draghi’s footsteps, and above all having to implement this historic commitment of “whatever it takes”.

The government of Francois Bairroux, who succeeded Barnier, essentially proposes similar steps to the previous one, at a time when France’s public debt has reached 112% of GDP, the annual deficit is 6% and the forecast for 2025 – if nothing changes – it’s at 6.3%. It is considered rather unlikely that the ambitious friend of the French president, who has now been asked to pull the chestnuts out of the fire, will last long in this position and succeed in putting France on a path of improving its finances. At the same time, society is boiling and the Brussels threatens measures due to excessive deficits. Political and economic instability is expected to continue and this underlines how risky, if not ultimately criminal, Macron’s choices have been since the summer.

2025 is not 2012

This means in plain… French that if the crisis continues in France, maybe at some point the markets will decide to test Draghi’s promise in practice. Will Lagarde be able to deny the French what Draghi could not deny the Italians? The risk for Europe’s first female banker now seems even greater.

After all, 2025 is very different from 2012. At that time in the USA there was a president in Barack Obama who actually seemed to want the cohesion of Europe. Now there is Trump, who not only doesn’t seem to care about Europe, but is also threatening it with trade wars. At that time, the German economy was strong and operated as a “steam engine”, even if not for all the countries of the Eurozone. Now Germany is economically in a state of lethargy and politically in a state of panic. Back then, Britain was still part of the EU. Back then, defense-military spending was not so insatiably sucking up an increasingly large part of public spending. Now Europe sleeps and wakes with its mind in a war.

All this shows that in the end the possibilities of the “lender of last resort” may not be as unlimited as they once imagined or as they tried to convince the words of the Italian politician-banker that they are. The impasse toward which France appears to be moving may turn into an impasse for Lagarde as well. In other words, a dead end for Europe as well. And for Macron to go down in history, not as he wished, that is, as the one who reformed Europe, but as the one who tore it apart.